Problem 1: A manufacturer sells a product for $200 per unit. The variable costs are $120 per unit and the fixed costs are $50,000 per month.
a. How many units would the manufacturer have to sell per month to break even?
b. If the fixed costs are increased by 10% and the variable costs are increased by 15%, what should be the new selling price to have the same break-even volume per month?
Problem 2: A store purchases a product for $2.50 each and sells it with a markup of 14% on cost. To clear inventory, the store sells the product at cost. Calculate the rate of markdown.
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